Abstract
The sponsor company faced challenges in optimizing middle-mile replenishment frequency due to the inevitable trade-off between transportation and inventory carrying costs. To address this challenge, we conducted a comprehensive analysis comparing transportation and inventory costs across multiple replenishment frequency scenarios. Additionally, we implemented a high-performance vehicle routing problem (VRP) solver to redesign the middle mile transportation network, reducing total distance traveled by over 2 million miles a year and net working capital (NWC) by over 80 trucks every replenishment cycle. Our deliverables enabled the company to improve operational efficiency and reduce costs through optimized routing and replenishment strategies. As they expand their business, the company can continue to generate cost-effective, data-driven decisions by inputting new data into the flexible model we developed.
